The S&P Global Philippines Manufacturing PMI, a composite measure of manufacturing performance, stayed above the growth threshold but pointed to a slower increase in February.
PMI edged down for the second consecutive month to 51.0 in February from 52.3 in January. A score above 50.0 indicates expansion.
“Robust growth seen at the turn of the year waned in February, with survey data indicating slower expansions in output and new orders,” said S&P Global Market Intelligence economist Maryam Baluch.
Baluch noted that despite the dip, manufacturing conditions improved in each of the last 18 survey periods.
She said that for the first time in three months, employment levels rose as firms struggled to meet sustained demand with a new rise in backlogs.
S&P noted that inflationary pressures eased, suggesting that the central bank may continue its monetary policy loosening, which may be able to help restore business confidence and support further new order growth.
According to the report, manufacturing sector gains were underpinned by improving demand and another monthly rise in new orders.
Following strong growth in late 2024, the expansion rate moderated in February, registering the weakest increase in seven months. Growth in new export orders also slowed.
As a result, production growth softened, with output expanding at its slowest pace since July 2024.
Cooling demand trends also led to slower purchasing activity, with February marking the weakest expansion rate in a 15-month growth streak.
Despite this, firms faced capacity pressures, reporting a rise in backlogs for the first time in five months.
While modest, the buildup in unfinished work was the sharpest in nearly two years, the report said. To meet order requirements, companies drew down inventories, leading to the first reduction in input stocks in three months.
Filipino manufacturers recorded a renewed, albeit slight, rise in employment after two months of stagnation, while softer demand contributed to an easing of cost pressures.
They remained optimistic about production over the next 12 months, hoping for sustained demand growth and an economic boost from the upcoming election. However, confidence levels dipped to a ten-month low.
